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Know your employee. Why does it matter?

Traditionally, we have concentrated on identifying our customers, but what about our employees and third-party service providers?

Research has shown, through use of Suspicious Activity Reports, that, corporate losses, due to employee theft and embezzlement exceed $1.5 B a year. The best way to reduce insider abuse is to stop it before it starts. This process should begin during the hiring process, exercising the same precautions we would use when establishing a new account relationship. The most important way to deter employee theft is to be aware and prepared for the fact that it happens. Dishonest employees avoid detection when managers refuse to accept the idea that trusted employees are targeting them.

Solid KYE policies and procedures should form part a sound compliance program, on the anti-money laundering, ethics, fraud and FCPA fronts. All relationships between an organization’s clients, employees, and third party service providers carry a level of risk…